The increasing use by many businesses of cloud based accounting packages, which draws data in directly from their on-line banking, has made the availability of regular, routine, reliable management accounts a reality. Such cloud based packages encourage business owners to maintain their accounting records on an ongoing basis rather than doing period, bulk updates.
Not only does this approach to record keeping (a little often rather than the pain of infrequent hits) help business owners and managers keep in touch with their organisation, but it enables the production of interim management accounts usually on a monthly or quarterly basis.
The benefit of management accounts is they can show what the management team need to know in order to do their job. These accounts are not constrained by the formalities of statutory accounts; they can be tailored and presented as considered appropriate.
Your accountant will be able to help you tailor these management accounts, which can include budgets to allow for variances to be monitored and corrective action to be taken where considered necessary. Variance analysis can be enhanced with the addition of ratio analysis to help give useful insights as to how your business is performing – have you ever been asked for your EBITDA?
Management accounts can also help with the management of tax liabilities; VAT and Corporation Tax liabilities can be anticipated and cash managed accordingly. The accounts can also be used to help with staff bonus and commission payments.
Good internal management accounts should make the production of your final year end accounts a formality. Investing in good quality in year accounts may bring down the price of your year end accounts.
Speak to your accountant for further information about cloud based accountancy packages and the production of regular in year accounts for the benefit of your business.
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